March 21, 2011, Montreal – Several measures in last week’s provincial budget will have a serious negative impact on Quebec’s restaurant industry, according to the Canadian Restaurant and Foodservices Association (CRFA).
The biggest impact is expected to stem from an increase in the Quebec Pension Plan (QPP) rates, which the CRFA claims will hurt businesses that invest in people, not equipment. Quebec’s restaurant industry employs 257,000 people, including 109,000 youth. The 2011-2012 budget increases QPP contribution rates by 0.15 per centage point for six years beginning Jan. 1, 2012, raising it from 9.9 per cent to 10.8 per cent of insurable earnings for employers as well as employees. Over the six years, each will contribute a total of $650 million.
"Let us not forget that payroll taxes in Quebec are already 30 per cent higher compared to the rest of the country," says Jean Lefebvre, Quebec vice president for the CRFA. "Pushing these taxes even higher will punish restaurant owners for creating jobs."
In addition, an extra one cent tax on each litre of fuel will kick in on April 1, and the Provincial Sales Tax will go from 8.5 per cent to 9.5 per cent in 2012. These measures will leave less money in consumer pockets, including less money for leisure and outings to restaurants. The CRFA warns that the sales tax increase will also widen the gap between foods that are taxed depending on where they are purchased (i.e. from a restaurant versus from a grocery store).
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